Friday, September 21, 2007

Read in the Post this morning that Nielsen reports that advertising spend decreased in the first half of 2007 compared to the first half of 2006. Is the dreaded advertising recession upon us?

Who cares? While overall ad spend was down 0.5% in the first half, online advertising was up 23%. Twenty-three percent? 23%. That's a lot.Blodget's take is that the sky may still fall: "we still question how long this strength can continue if the overall pool of ad dollars shrinks..." Sorry to tell you Henry, but the overall pool just did shrink... and online grew like wildfire.

In reality, both Blodget's and my arguments are completely unaffected by this report. We had no economic turbulence in the first half to speak of. Why did ad dollars go down? I doubt anybody knows, but I'm guessing it has to do with the 50% of variability that has nothing to do with overall GDP growth. I'm in the process of building a ginormous spreadsheet with all available economic data from 1900 to today. Then I'll start doing statistical analysis to find the real drivers of ad spend growth or decline. I expect--when I'm done in five or six years--to be able to answer this question.

The really surprising thing in this report, to me, is that spend in national magazines grew by 8.4% while local magazines fell by 5.2%. What's up with that?